Sooner or later, an employee is going to stop by HR with a letter from the state and ask for proof of their hours. Most of your Medicaid-covered employees will never need to. The state looks at its own records first. But for the ones who do get asked, how quickly you answer can decide whether they keep their coverage.
Here's what the new rule asks for, who's likely to end up at your desk, and how to be ready.
What the rule asks employees to show
Under the CMS rule on Medicaid work requirements, adults ages 19 to 64 who get Medicaid through their state's expansion have to show one of these for a month:
- 80 hours of work, volunteering or a job training program, or a mix of them
- Enrollment in school at least half-time
- Earnings of at least the federal minimum wage times 80 hours
That last one is the line that matters most for your workforce.
Source: CMS, 2026.
So an employee who earns that much doesn't have to prove a single hour. Seasonal workers get a different test, based on average earnings over the past six months.
Plenty of people are exempt, including:
- Parents of a child 13 or younger
- Caregivers of a disabled person
- People who are pregnant or postpartum
- People the state finds medically frail
The full list is in the CMS fact sheet.
The deadline is January 1, 2027, though states can start sooner. Three already have, according to NPR: Montana, Nebraska and Arkansas.
Elsewhere, most states told a KFF survey in early 2026 that they'd check when someone applies and again at each renewal, every six months, looking back one month each time. People already on Medicaid get checked at their first renewal after the start date. So the requests won't all arrive in January. They'll trickle in all year.
The state checks its own data first
Nothing in the rule requires employers to do anything. The work of checking falls on the state, and the rule makes it look before it asks.
Before a state can ask an employee for paperwork, it has to try the records it already has: wage reports from other state agencies, federal data, and payroll data. Most W-2 employees show up in those records. Many also show up in commercial verification services like Equifax's The Work Number, which, according to a CBPP review of the vendors states are using, covers many W-2 workers but often not gig or contract workers.
When the data can't confirm it, the state has to ask the employee. CMS names pay stubs as the example of proof most people can get. After a notice that it couldn't verify, the employee has 30 days to show they meet the rule or are exempt. Miss that and they can lose coverage, though they can reapply.
The rules tighten in 2028. Until then, states can accept other kinds of information. Starting January 1, 2028, when the data comes up short, states have to ask for documents like pay stubs whenever someone can reasonably get them. Expect more requests to reach HR from then on.
Who's likely to come to HR
This part is our read, not something CMS lists. The employees who end up asking you for proof will mostly be the ones the state's data can't see clearly:
- New hires, whose first paychecks may not have reached state wage records yet
- Part-timers with hours that swing, especially anyone earning close to $580 a month
- People with more than one job, where neither paycheck alone tells the whole story
If your workforce is hourly, shift-based or frontline, you'll see more of these requests than an office employer will.
How to handle Medicaid employment verification requests
Here's what we'd set up now.
Employment verification requests aren't new for HR. What's new is the volume, the 30-day clock, and the fact that a slow answer can cost someone their coverage.
Where your wellness program fits
The employees asking for proof often aren't on your health plan. That's usually why they're on Medicaid. They're also the people most likely to lose coverage over paperwork, and the stress of that doesn't stay home. We covered the bigger picture of Medicaid cuts and wellness in April.
Our view: if your wellness program is only open to people on your health plan, it skips the employees who need support most right now. A wellness program that reaches every employee, with text messages for people who never check email and coaching that works on a phone between shifts, is one way to stay in touch with this group while their coverage is up in the air.
